[Academic Perspective] Guan Tao: On China-US Trade Friction

Over the past decade or more, the Chinese government has been actively working to “expand domestic demand, adjust structure, reduce trade surplus, and promote balance”. The economic rebalancing has made positive progress. The ratio of current account surplus to GDP has fallen from nearly 10% to less than 2%. The bilateral trade imbalance between China and the United States is mainly caused by structural factors such as the international division of labor, the difference in savings and investment between the two countries, and the dollar-based international monetary system. In general, China and the United States are both beneficiaries of bilateral trade. Both China and the United States have gained huge commercial benefits; it is not a zero-sum game.

It is normal that there are disputes and frictions in the economic and trade exchanges between the two countries. China listens to the legitimate concerns raised by the United States and responds in a positive manner. However, the U.S. side has taken a series of trade policies and actions unilaterally against China, which are nothing but unapologetically unilateralist and trade protectionist practices, and have undermined the rules of the global multilateral trading system. China’s rational and effective counterattack is our last resort.

After 40 years of reform and opening up, China has the will and ability to safeguard the country’s core interests and will not succumb to external pressure. However, as two major countries in the world economy and trade, the escalation of trade frictions is not only unfavorable to both countries but also to the world. Rational consultation and close cooperation are the reasonable way to resolve the trade dispute between the two countries.